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I am trying (really hard) to move to Vegas but it seems it just isn't happening and it is driving me crazy. I've been visiting a number of times, looking at 20+ homes, done what I can to make things move along, given my bank (Chase) everything short of a DNA sample to show them I am not going to forclose in the foreseeable future. I'm looking for homes in the 135-160k range and have found several homes at a good price and made several bids and won two.
My problem is that I now have been burned twice by the bank's appraisal. One home in turn-key shape, was appraised 15k less than agreed upon price - contract was 158k, 1650 sq ft, excellent shape.
The second one was appraised 24k less than agreed upon price - contract was 144k, 1250 sq ft, terrific shape; which I found out just today. On both properties, there was definitely competition, and multiple bids. Both contract prices were not more than 1-2k from list price.
Since I don't really have enough cash more than to put 10% down on the loan, 4% closing and 5-10k to go between for lower appraisals, what can I do!?
The first house got sold to a cash investor just 2 weeks after I was forced to back out of escrow, for at least 160k, i.e. even more than 15k above appraised price.
Now Chase also tells me that I can't get a loan for flip properties if it is less than 90 days from previous sale. Why is this, anyone know?
It feels like what the banks (or my bank at least) is doing is nothing but encouraging cash investors and leaving no options for regular mortals like myself. All homes I have bid on (10+ homes) I have only been approached back by these 2 that I won the bid on, so I am fairly confident in that my bids are not substantially higher than others - I mean, there's definitely competition on these homes, and I think the bank is appraising extremely conservatively. And it is stopping me from getting a home. It might be worth to mention that I have a pre-approval to loan 200k but it's not helping me.
Also worth to mention is that I submitted for pre-approval in October 09 and didn't get it until January this year. And when requesting an appraisal, wait time has been between 14 and 21 days. Is this normal?
What are your thoughts? Is there anything I can do? I guess I am stuck with fixer-uppers? Because now it feels like all I am doing is paying the salary for the appraiser.
Also, do you think there's any chance to see the first-time home buyer refund period extended?
Now Chase also tells me that I can't get a loan for flip properties if it is less than 90 days from previous sale. Why is this, anyone know?
Not 100% sure but this may have to do with anti-money laundering regulations. Alot of LLC's right now acting as wholesalers and the banks don't have the manpower to investigate each transaction.
I've heard there's alot of dinero coming from south of the border...
I assume you've gone back to the seller & said "the house doesn't appraise. Lower the price." or something like that. I presume the sellers said "no." Did it work like that? Can you give us some details? Did the seller agree to do anything - or just say "sorry, bub, I've got other buyers"?
There is a one way to think about this. Maybe the bank is right. Maybe they are saving you from the horror of putting your hard earned $$$ into the house & finding out you are underwater within a matter of months.
I am trying (really hard) to move to Vegas but it seems it just isn't happening and it is driving me crazy. I've been visiting a number of times, looking at 20+ homes, done what I can to make things move along, given my bank (Chase) everything short of a DNA sample to show them I am not going to forclose in the foreseeable future. I'm looking for homes in the 135-160k range and have found several homes at a good price and made several bids and won two.
My problem is that I now have been burned twice by the bank's appraisal. One home in turn-key shape, was appraised 15k less than agreed upon price - contract was 158k, 1650 sq ft, excellent shape.
The second one was appraised 24k less than agreed upon price - contract was 144k, 1250 sq ft, terrific shape; which I found out just today. On both properties, there was definitely competition, and multiple bids. Both contract prices were not more than 1-2k from list price.
Since I don't really have enough cash more than to put 10% down on the loan, 4% closing and 5-10k to go between for lower appraisals, what can I do!?
The first house got sold to a cash investor just 2 weeks after I was forced to back out of escrow, for at least 160k, i.e. even more than 15k above appraised price.
Now Chase also tells me that ?I can't get a loan for flip properties if it is less than 90 days from previous sale. Why is this, anyone know
It feels like what the banks (or my bank at least) is doing is nothing but encouraging cash investors and leaving no options for regular mortals like myself. All homes I have bid on (10+ homes) I have only been approached back by these 2 that I won the bid on, so I am fairly confident in that my bids are not substantially higher than others - I mean, there's definitely competition on these homes, and I think the bank is appraising extremely conservatively. And it is stopping me from getting a home. It might be worth to mention that I have a pre-approval to loan 200k but it's not helping me.
Also worth to mention is that I submitted for pre-approval in October 09 and didn't get it until January this year. And when requesting an appraisal, wait time has been between 14 and 21 days. Is this normal?
What are your thoughts? Is there anything I can do? I guess I am stuck with fixer-uppers? Because now it feels like all I am doing is paying the salary for the appraiser.
Also, do you think there's any chance to see the first-time home buyer refund period extended?
This may not make you feel any better but what is happening to you is the new normal. Bank properties usually appraise less than the offer and that is because people like yourself offer more than it really is worth. Has your realtor been doing comps before you offer, because I have been finding that the listing prices on some properties are even higher than the comps. Cash buyers are 50% of the purchases in Vegas and the surrounding area.
It's unfortunate that banks are causing this by listing homes with low prices that they want to get as many bids as possible and then by doing that the offers are higher than what the home is worth which means either the buyer has to cough up more than the appraisal or back off.
And who in their right mind would pay more than what the property is worth in this day and age. I have had a couple of clients pay more just because they loved the home and had no intention of moving for years, just the same it's not a good idea. Home values appear to seem some what stable but it's just a mirage, the banks are manipulating the inventory and prices.
Eventually backed up inventory will have to be released.The number of foreclosure filings on Nevada homes rose 34 percent in March compared with February, and the delinquency rate for homeowners is also on the rise, according to statistics released by research firms.
Nevada continues to hold the top spot in the nation for foreclosures in March and the first quarter. It has been No. 1 since January 2007.
It's not chase that has implemented that a buyer cannot purchase a flip if it is less than 90 days from previous sale. It is FHA that mandates this so chase has to follow that program.
Why don't you look at new homes there are new homes in your price range, the home will have a warranty the appliances will be new and under factory warranty and you won't be paying for two appraisals? On a flip with FHA they are starting to require two appraisals.
SportyandMisty: Yes, in the first case, I did go back to the seller and ask that they would meet or come within range of the appraisal, but they wouldn't budge - I guess I can understand that since they had no problem selling a couple of weeks later. This 2nd time, we had no idea that the house was sold less than 90 days ago, since the tax records hadn't been updated and the seller hadn't shared this with us - and frankly, I wasn't aware of this rule before. So I think even if the seller would consider lowering the price, I still would not be able to get a loan.
My main concern with brand new homes has been all the additional fees involved, Master plan, SID/LID and HOA on top. Especially if it isn't an established area, wouldn't I be in risk to carry the load of un-occupied homes in the neighborhood?
I of course am well aware of what has happened to the housing market in Vegas the last few years. But it seems to me that I wouldn't be in over my head in the long run (I am buying to live there for the foreseeable future) if I can buy a house for 140k that sold 3 years ago for 300k. Yes, I know that the prices will not climb to those levels in the next 5 or maybe 10 years, but still - if I pay 140k rather than 120k for a home, I don't feel like I'm way over my head.
Last edited by crazy_bd; 04-24-2010 at 10:29 AM..
Reason: spelling
My main concern with brand new homes has been all the additional fees involved, Master plan, SID/LID and HOA on top. Especially if it isn't an established area, wouldn't I be in risk to carry the load of un-occupied homes in the neighborhood?
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not all new homes have the master plan, sid or lid.. you are going to find the hoa on almost anything you can find, new or used..
look at it from the sellers perspective, if i have 2 potential buyers, one with a loan, the other with cash.. the cash buyer is the same or a few grand less.. which do i take.. i take the cash since i don't care where the house is going to appraise.
SportyandMisty: Yes, in the first case, I did go back to the seller and ask that they would meet or come within range of the appraisal, but they wouldn't budge - I guess I can understand that since they had no problem selling a couple of weeks later. This 2nd time, we had no idea that the house was sold less than 90 days ago, since the tax records hadn't been updated and the seller hadn't shared this with us - and frankly, I wasn't aware of this rule before. So I think even if the seller would consider lowering the price, I still would not be able to get a loan.
My main concern with brand new homes has been all the additional fees involved, Master plan, SID/LID and HOA on top. Especially if it isn't an established area, wouldn't I be in risk to carry the load of un-occupied homes in the neighborhood?
I of course am well aware of what has happened to the housing market in Vegas the last few years. But it seems to me that I wouldn't be in over my head in the long run (I am buying to live there for the foreseeable future) if I can buy a house for 140k that sold 3 years ago for 300k. Yes, I know that the prices will not climb to those levels in the next 5 or maybe 10 years, but still - if I pay 140k rather than 120k for a home, I don't feel like I'm way over my head.
The resale home that your looking at that sold for 300K and is now selling for $140,000 is probably what the home was worth to begin with because the market was over priced during those times.
As far as lid's and sid and master plan fees on a new home those can be on a resale as well. Those go with the home not the seller. There are new home communities that don't have master plan fees or sid's or lids.
And they are in nice neighborhoods. New homes have to appraise out just like a resale, if it comes in less then the selling price some builders will give in. However new home builders now understand the market and have priced there homes so the appraisals will come in.
You will not be carrying any more risk with a new home community than a established one, in fact your more apt to carry extra risk in purchasing in a established neighborhood with allot of foreclosures and short sales. The distressed homes in a established neighborhood are more likely not to pay their HOA's or taxes and if that's the case the HOA's will go up to make up for the deficit. Where as a new home community the builder will make up the difference until the community is sold out.
New home communities have lowered their prices to compete with resale's plus you can get them to pay Closing costs, the taxes will be paid sometimes you negotiate the builder to pay HOA's for a year.
Thanks! Could you give a few examples of new neighborhoods in my range?
DM me and I will forward you some new home communities and see if you would like them. I am surprised your realtor hasn't showed you any.
When you DM me give me price and criteria your looking for so I can send you properties that match. I have access to all new home communities at my finger tips.
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